Delaware, Ohio—Hamilton Point Investments has acquired Troy Farms, a 304-unit apartment property in suburban Columbus, Ohio, for $27 million. The asset marks the seventh acquisition by HPI Real Estate Fund IV LCC, which is managed by Connecticut-based Hamilton Point Investments; the fund will close to new investors next month.
Troy Farms, which was developed in 2006, is comprised of 41 two- and three-story buildings on 28.5 acres. It offers one-, two- and three-bedroom units, as well as townhomes, averaging 1,000 square feet. Common amenities include a swimming pool, parking garages, walking trails and two large ponds with fountains.
Matt Sharp, Hamilton Point Investments co-founder and managing principal, told MHN that his company “acquires post-2000 construction apartment properties in markets experiencing strong population and employment growth for below replacement cost. Delaware is a very fast-growing market in suburban Columbus and our basis, at $88,000 per door, is well below replacement cost.”
Sharp added that multifamily fundamentals are as strong as they have ever been. For one reason, as the homeownership rate in the United States has decreased from about 69 percent to 63 percent over the last decade, there’s been a sizable increase in rental apartment demand.
“We’ve seen strong occupancy and rental growth in all the markets we’re in, and don’t see a reason that should flatten too much,” Sharp said. “The only real risk is overbuilding, and we mitigate that by making sure we are buy for well below replacement cost. A lot of good things need to happen in terms of occupancy, rental rate and property value growth before someone will go down the street from Troy Farms and spend $140,000 per unit to build something comparable to what we just acquired for $88,000 per unit.”